Sacramento: Taxpayer money is part of plan to cut rates and assist utility. A large increase in college grants program is approved; bid to license gun owners shelved.

SACRAMENTO — The Legislature on Wednesday approved a pair of measures to use $150 million in taxpayer money to help San Diegans with this summer's electricity price spikes and to immediately cut electricity bills in San Diego.

The assistance measure sets aside $150 million to be tapped if, by 2003, San Diego Gas & Electric's losses are so great that to cover them would mean an additional 10% increase in the average customer's annual bill. It was approved by the Senate on a 27-11 vote and by the Assembly 59-8.

A spokesman for Gov. Gray Davis said the governor supports the rate-relief bill, AB 265, but is undecided about the $150-million safety net measure--termed a bailout by some lawmakers.

"When you go down to San Diego and you see the businesses closing down, we need relief today," said Assemblywoman Susan Davis (D-San Diego), "because the businesses won't be there when we turn around."

Some opponents said they fear the $150-million subsidy could set a precedent. Others said the measures won't solve the state's long-term energy problems.

"I'm extremely worried about the precedent being set," said Sen. Tom Hayden (D-Los Angeles), who joined a handful of Republicans in opposing the package. He called the $150-million reserve, contained in AB 1158 by Assemblywoman Denise Ducheny (D-San Diego) and Assemblyman Jim Battin (R-La Quinta), a "bailout" for SDG&E.

The rate-relief bill by Democratic San Diego lawmakers would cut the current price of electricity charged to all but the biggest customers of San Diego Gas & Electric, making the average homeowner bill drop to about $68 from $128.

The measure passed the Assembly 58-12 Wednesday after clearing the Senate on Tuesday.

Scrambling ahead of the final day of the two-year legislative session, top lawmakers also worked Wednesday to fashion a major expansion of health care for low-income working parents. And the Legislature approved scores of bills, including a large boost in the state's college grants program.

The state Senate gave final approval to what Democrats and Republicans hailed as a historic overhaul of the Cal Grants college aid program. The bill, likely to be signed into law by Davis, would offer college grants to all qualified low- and moderate-income high school graduates at an eventual cost of up to $1.2 billion.

"The state is going to reap the benefits of this for years to come," Senate President Pro Tem John Burton (D-San Francisco) said, proclaiming the measure (SB 1644) to be "one of he most significant things that any Legislature has ever done."

Other measures approved include an attempt to restore a version of the open primary, a bill that extends the time people have to register to vote and a consumer protection bill for people who carry balances on their credit cards.

A measure to require licenses for gun owners, an idea opposed by Davis and some police, was dropped by its author, Assemblyman Jack Scott (D-Altadena). The bill had passed the Senate and was awaiting an Assembly vote.

Scott said he dropped the measure (AB 273) after conversations with Davis persuaded him that he had little chance of seeing his bill signed into law this year. Davis had called for a moratorium on new gun control bills.

"I want to make it clear that my commitment to passing a law that will license gun owners has not wavered," Scott said. "Rest assured, I will pursue this measure again next year, or however long it takes for it to become law."

Measures still pending included a change in the car tax cut approved earlier this summer. Lawmakers were planning to break Wednesday night for their annual end-of-session bash.

Late Wednesday, Speaker Bob Hertzberg (D-Sherman Oaks) was negotiating with Davis on a proposal to expand Healthy Families, a state program aimed at providing health care coverage for children.

The expansion could include coverage for as many as 600,000 more families. It would be financed by using part of the $500 million the state receives annually from the settlement of the national tobacco litigation.

"We are working hard. We don't know what the endgame is," Hertzberg said.

Other weighty issues being negotiated ranged from new rules on timber clear cutting to a revival of a bill aimed at stopping police use of racial profiling. A package of business tax breaks also was being considered.

In a step toward reversing a decision made two months ago, the Assembly approved legislation that would give motorists an outright cut in the car tax, the fee Californians must pay to register their cars each year. The bill is awaiting a Senate vote.

As it stands, motorists would have to pay their bills in each of the next two years, then get rebates about a month after they write their checks. The rebate plan advocated by Davis stirred controversy because the cost of mailing the checks to owners of more than 25 million vehicles, together with notices explaining the reason for rebates, would have topped $20 million.